The US is emerging as an unexpected bright spot for luxury goods, even as China’s recovery remains uneven and Europe faces cautious consumer spending. In recent earnings reports, nearly every major luxury group has highlighted the US as a key growth driver, despite challenges like rising tariffs and higher prices.
In the third quarter, the US market showed stronger performance compared to the previous quarter. LVMH exceeded expectations in the US with a 3% increase over the same period in 2024. Kering also saw standout results in North America, where sales rose 3% across all brands, rebounding from a 10% decline last quarter. Hermès maintained robust growth in the Americas, with sales up 12.3% in Q2 and 14.1% in Q3. Ferragamo’s North American sales jumped 15.6%, driven by direct-to-consumer channels, a sharp turnaround from the previous quarter’s 3.3% drop. Ermenegildo Zegna Group posted an 8.2% sales increase in the Americas, thanks to strong direct-to-consumer performance, even after raising prices due to tariffs in September. Prada Group led the pack with 15% sales growth in the Americas over the first nine months of 2025.
This week, US-based companies Capri, Tapestry, and Ralph Lauren are set to report earnings, followed by Burberry and Richemont next week. Capri has faced ongoing challenges since its merger with Tapestry fell through, while Ralph Lauren and Tapestry have recently seen stronger results in Europe. Meanwhile, the US was the top-performing region for Burberry and Richemont last quarter.
In June, Bain reported that US consumer confidence dipped after President Trump announced new tariffs, casting uncertainty over the luxury sector’s 2025 outlook. However, the latest results indicate that the US is not only weathering these challenges but also balancing out weaknesses in other markets.
Tariffs introduced earlier this year raised fears that higher prices would reduce demand. While mass-market retailers have mostly avoided price hikes, luxury brands have used their pricing power to increase prices by 5-10%. Although some analysts warn of demand being pulled forward ahead of further price increases, especially for Swiss watches, the overall impact of tariffs on luxury has been less severe than anticipated, due to a combination of macroeconomic and behavioral factors.
“US luxury demand has been relatively strong post-election, with higher-income consumers less affected by the pressures impacting the broader population,” says Adam Cochrane, an analyst at Deutsche Bank. Tax cuts for wealthy Americans under the Trump administration have also helped insulate affluent consumers from inflation. “The stock market rally has created a positive wealth effect that often leads to strong luxury spending,” Cochrane adds.
Paola Durante, Ermenegildo Zegna Group’s chief of external relations, noted on the Q3 earnings call that the company hasn’t seen a negative response to recent price increases. “Any price adjustments are carefully analyzed by our merchandising team to ensure they align with the full-price collection and protect key price points.”
The S&P 500’s continued rise has fueled the “wealth effect,” supporting luxury consumption. “American consumers are highly exposed to financial markets, including stocks and crypto,” says Luca Solca, a luxury analyst at Bernstein. “Strong markets boost the wealth effect and consumer confidence.”
While some brands have relied on price increases to drive growth, LVMH’s performance in the US has been more influenced by increased foot traffic and sales volume, according to CFO Cecil.During the earnings call, e Cabanis stated, “We’ve consistently mentioned that we would only implement very moderate price increases if necessary due to inflation and tariffs, but that wouldn’t be the main factor driving prices. Our top priority is the product mix and value, ensuring that any price hike is justified by enhanced quality or functionality.”
Kering CFO Armelle Poulou highlighted an uptick in foot traffic and added that growth is also supported by an improvement in average unit retail (AUR). She noted, “We’re observing strong resilience among high-end customers, along with solid e-commerce performance, which typically attracts more aspirational shoppers.”
Looking forward, the US remains a key focus for many luxury brands. On Hermès’ Q3 earnings call, EVP of Finance Eric du Halgouët emphasized, “The US is a market where we’ll concentrate our expansion efforts. We recently opened a store in Nashville, Tennessee, and plan to continue developing our network there.”
Executives and analysts pointed out that the US market will face easier comparisons in the future. Morningstar analyst Jelena Sokolova explained, “My view was that US luxury spending was subdued from 2023 to 2025 due to a tough comparison period—the post-pandemic surge driven by stimulus checks and savings from reduced travel—despite a robust economy and strong stock markets, which usually signal growth.”
Currency trends are also influencing spending. Cochrane noted, “The strong euro has encouraged more US consumers to shop domestically rather than in Europe, boosting local sales.” He added that price increases have contributed to sales growth as well.
Analysts believe domestic brands will benefit from these currency shifts. Companies with established US distribution networks are at an advantage, as consumers are wary of hidden costs like customs duties and fees when ordering from abroad. Local distribution simplifies the buying process and reduces the risk of international shipping charges.
Looking ahead, analysts anticipate that US consumers will remain fairly resilient. Sokolova predicts, “Unless there’s significant and unexpected market volatility, I expect US demand to continue growing at a mid-single-digit rate, aligning with pre-pandemic long-term trends.”
More on this topic:
– LVMH fashion sales down 2% in Q3
– Kering’s sales fall 5% in Q3
– Hermès’s third-quarter sales rise 9.6%
Frequently Asked Questions
Of course Here is a list of FAQs about why luxury brands continue to thrive in the US designed to be clear helpful and easy to understand
Beginner Definition Questions
1 What exactly is a luxury brand
A luxury brand is a company that sells highquality premium products or services that are often expensive exclusive and carry a prestigious reputation Think of brands like Chanel Rolex or Louis Vuitton
2 Arent luxury goods just overpriced Why would anyone pay so much
While the cost is high people arent just paying for the physical item They are paying for superior craftsmanship highquality materials exclusive designs and the brands heritage and status
3 With inflation and economic worries shouldnt luxury spending be down
It seems logical but luxury brands often thrive even during economic uncertainty Their core customers are wealthy enough to be less affected and aspirational shoppers still save up for key items as a treat or status symbol
Reasons for Their Success
4 Whats the main reason luxury brands are so successful in the US
There isnt one single reason but a key factor is brand perception These brands have successfully built an image of exclusivity quality and social status that American consumers are willing to invest in
5 How do social media and influencers help luxury brands
Platforms like Instagram and TikTok make luxury more visible and aspirational Seeing influencers and celebrities with these products creates desire and makes the brands feel more accessible even if they are expensive
6 Is it just about showing off wealth
Not entirely While status is a major driver many consumers genuinely value the quality and longevity of a wellmade product The idea of buying a forever item that wont go out of style is very appealing
7 Dont younger generations care less about luxury brands
Actually the opposite is often true Gen Z and Millennials are a huge market for luxury Brands have adapted by collaborating with streetwear labels embracing sustainability and creating more casual entrylevel products
Common Problems Criticisms
8 What are the biggest challenges facing luxury brands today
Their main challenges include combating counterfeit products maintaining an exclusive image while